HCC to acquire stake in Karl Steiner

Hindustan Construction Company (HCC) is to acquire a controlling stake in Karl Steiner - a Swiss contractor that specialises in the development of new buildings and refurbishments.

HCC will acquire a 66% stake in Karl Steiner via a new share issue to the value of CHF 35 million (€ 24 million).

In a statement Karl Steiner said it will use the funds raised for its Swiss operations and the growth of its core business in India's growing residential and commercial construction market.

It is envisaged that Karl Steiner's sole owner Peter Steiner will sell his remaining shares to HCC in 2014 but until that time he will remain a minority shareholder and fully support HCC's management of KSAG as vice-chairman.

HCC' s chairman and managing director, Ajit Gulabchand said in the statement, "This acquisition has been carried out on grounds of strategic fit both to capture local market opportunity and to provide us with a presence for European expansion.

"Karl Steiner's rich history and expertise in Total Services Contracting will allow HCC to undertake the development and construction of world class residential and commercial spaces on a turnkey basis in India. This is one of the fastest growing segments in India, and we look forward to addressing the Indian customer's needs for top class, green and well integrated spaces for living, work and leisure."

He added, "We welcome Karl Steiner into the HCC family and look forward to an immediate value addition in each one of our business lines."

Peter Steiner, chairman of Karl Steiner said, "I am very pleased that, in view of my succession and after the sale of our French subsidiary last November, we have now also found an excellent solution for our primary business. HCC's commitment allows us, as envisaged, to continue our activities and projects, and it is in the best interest of our clients, employees and business partners. HCC is an impressive, very well-managed company that has secured a leading market position in booming India."

KG Tendulkar, deputy managing director for HCC, will lead Karl Steiner and join the company's Board once the transaction is finalised.

The transaction is subject to approval of relevant authorities in Switzerland and India, and is scheduled to close in the second quarter of 2010.